DMA's Levering Bares All on Use Tax

Moving on after 13 years of legal and regulatory wrangling on behalf of catalogers, the Direct Marketing Association's outgoing senior vice president for catalog issues is leaving his successor to finish a battle that was at the center of his proudest accomplishments and biggest regrets.

Since joining the DMA in 1985, Robert J. Levering was at the heart of two significant DMA victories against the collection of use tax, as well as the sharp criticism the association received in the fall after reports that a voluntary use-tax collection agreement was in the works.

For his successor, the issue will continue, involving not only traditional catalogers, but the newest category of direct marketers, Internet marketers.

"I would tell a successor to keep an eye to the Internet," said Levering, whose last day was Feb. 13. "The tax system derived from the Internet will determine the mail-order tax issue."

Although he credited the Internet as being a great avenue for business expansion for catalogers, he also noted that if the medium grows as fast as predicted, states soon will lament the retail revenue lost to out-of-state Internet sellers.

"States will say this is not a loophole, it's a hemorrhage," he said, "and if tax collection on the Internet becomes a rule, you can't have a different rule for traditional direct marketing."

Levering's most recent work on this issue was his least favorite. It involved damage control in the fall after The New York Times reported that a DMA-brokered plan to begin collecting tax on mail-order items was imminent.

After the article was published, DMA president H. Robert Wientzen issued a statement saying that some states and catalogers had arrived at only a preliminary draft of an agreement that was years from completion.

"It was a situation where the person writing the story pulled together things from facts and put together a story that was false," Levering said. "I'm used to dealing with trade reporters and reporters who are familiar with tax issues and how they work. While this reporter was a reporter for the business section, he had an eye to the front page -- that was his agenda. I didn't see it coming. It's my biggest regret."

Despite the uproar the article caused among DMA catalog members opposed to use-tax collection, the incident was not the cause of his departure, Levering said. He said that his resignation was a "mutual decision between me and Bob Wientzen," and that the Times story did not seem to influence Wientzen, a characterization that Wientzen described as accurate.

Ironically, past efforts on the use-tax issue were among the most rewarding projects of his tenure at the DMA, Levering said.

"My most exciting year-and-a-half was 1988 to '89, when we raised $2 million-plus in lobbying efforts against the use-tax bill," Levering said, referring to a bill for use-tax collection that had been introduced by then-Texas Rep. Jack Brooks, who was chairman of the House Judiciary Committee at the time. "We killed a bill sponsored by the committee chairman."

A close second to the defeat of the Brooks bill in excitement and satisfaction was the work he did to help Quill Corp. in its court battle against the state of North Dakota on the issue. Although most of the financial, tactical and legal burden of the case fell on Quill, the DMA was instrumental in persuading half of the states not to sign on to North Dakota's brief.

Looking forward, Levering said he is not sure whether he will continue to work in the direct marketing industry.

"I'm not closing any doors, but I'm opening some new ones -- and I may start to look at the new ones first," he said.

Meanwhile, Wientzen said he is speaking to potential candidates, but no talks have progressed far enough to be discussed publicly.

"I'm looking for two things: I'm looking for someone who is able to deal with the legal and regulatory issues, because there are a lot of regulatory issues," he said, "and I'm looking for someone with a customer-service focus who will be able to go out and meet the catalogers to set up an ongoing dialogue about how best to help them."